2012 Olympics: dust and accountancy

Cycling to the Olympic Park yesterday lunchtime, I got a little taste of the dust caused by the building works that has lately distressed citizens of Leabank Square. It wasn't dramatic, just a gradual awareness of my vision becoming slightly hazy and the discovery that a light film had gathered on my glasses. There was more solid proof of industry, too. The future media centre and athletes' village beyond have taken still more commanding form since these observations on Leabank Square blog a month ago:

The great steel skeleton sits high on our horizon and it seems to be moving quickly across what was once our view of the sky. Our bond with our sky, that is now so tragically eclipsed, is intense. These are the same skies that have given my children spectacular shows of double rainbows, lightening storms, distant rains drawing closer and starry moonlit nights...

Of course, the forces of change are telling us that future generations will benefit from all this disruption. These huge structures will give something back to the children of our community. But, so much has been lost to these forces. So much disruption has entered our lives - like a constant headache – the pain does not seem to cease. It is difficult to see the future vision, when majestic trees have been lost, green land has been taken away and our beautiful view of the sky eclipsed. The loss of all these things has been soul destroying. I don't think you have any idea just how profound our loss has been.

A different kind of loss has preoccupied the press, the London Development Agency and the London Assembly recently - a loss of control over the LDA's budget that has resulted in nearly £160 million more than the £995 million budgeted for being paid out to buy the land the Olympic Park now inhabits without anyone noticing.

That, vulgarly put, is the main finding of accountants KPMG whose report on the matter (pdf) appeared, conveniently sideways, on the LDA website among the documents to be discussed at tomorrow's Board meeting. It should be stressed that no evidence of fraud has been found. The problem arose from poor internal organisation, and its roots lie back in 2005 when the agency set about the compulsory purchase of that twilit patchwork of factories and warehouses that once lay between Hackney Wick and Stratford.

A thinly-veiled wrangle has now begun over where political responsibility for this "black hole" lies, as this morning's meeting of the Assembly's Economic Development, Culture, Sport and Tourism (EDCST) Committee demonstrated. The view of Conservative member Andrew Boff is that the "black hole" indicts the LDA as it was run under Ken Livingstone much more damningly than did the apparent misuse of far smaller sums by some organisations who received LDA grants. His take is that the new LDA regime introduced by Mayor Johnson should take credit for locating the problem.

Labour's Len Duvall and John Biggs are more interested in why it has taken the Boris LDA under Harvey McGrath and Peter Rogers, who appeared before the EDCST today, the best part of a year to bring the matter formally to light, and whether the possible sacking of two LDA employees would be an adequate response to what could be failings of a more systemic nature. McGrath and Rogers defended themselves, the latter protesting that as there'd been no indications of the £160 million overspend, there'd been no grounds for investigating sooner. He also disclosed that the KPMG report had cost about a million quid. He reckoned it was money well spent.

What no one disputes is that the hole will have to be filled by a combination of cuts and financial rescheduling, and there was some irritation - not least among the committees' trio of Tory members, Boff, Tony Arbour and Victoria Borwick - that the LDA was unable to supply more detail about which beneficiaries of LDA cash might suffer as a consequence and much else. Lib Dem chair Dee Doocey probably captured the somewhat suspicious mood of the meeting when she observed that while the agency has become more transparent than it was, it still has work to do. Watch the webcast of the meeting. Have an abacus to hand.